The National Fund for Environmental Protection and Water Management

RULES FOR GRANTING AND CANCELLATION OF LOANS AND GRANTING GUARANTEES, CREDITS AND SUBVENTIONS FROM THE NATIONAL FUND FOR ENVIRONMENT PROTECTION AND WATER MANAGEMENT IN 2007

Co-financing funds from the National Fund for Environmental Protection and Water Management, hereinafter called „the National Fund”, shall be intended for purposes as defined in the Act of 27 April 2001 on the Environmental Protection Law (Dz. U. of 2006, No. 129, pos. 902), hereinafter called “the Act”.

1. The entities carrying out projects as defined in the Act may apply for the National Fund financial assistance.

2. When granting the financial assistance, the National Fund apply the regulations in force, including regulations on public aid.

3. The National Fund shall grant the financial assistance on the basis of the civil law agreement, hereinafter called the Agreement, defining rules for financial assistance. The agreement shall be drawn up in accordance with the effective model.

4. The Management Board of the National Fund shall decide on form and amount of the financial assistance, applying rules described herein, taking into consideration the action plan and the reimbursement collateral assigned to the financial assistance.

5. The National Fund shall grant the financial assistance in accordance with the list of priority programmes.

the National Fund shall examine the mutual financial relations between the institutions granting the financial assistance. The National Fund shall grant its financial assistance subject to the results of this examination.

3) Credits granted from the National Fund by the banks based on the credit facilities,

8) Guarantees of credits repayments and of funds repayments granted by foreign governments and international organizations for environment protection and water protection purposes according to the Act of 8 May 1997 on guarantees and securities granted by the State Treasury and by some legal entities (~~Dz.U~~Dz. U. of 2003, No. 174 pos. 1689 with later amendments^{^[1]}). When granting the guarantee, the National Fund requires to provide collaterals for claims that may arise from exercising the duty of guarantor. The National Fund shall charge a fee.

1. Granting of the financial assistance shall take place only after adopting the resolution by the Management Board and only if the following conditions are met jointly:

1) the applicant submitted the application together with annexes using the forms provided by the National Fund, with the exception of the guarantee referred to in Article 2 par. 8,

2) the project is in accordance with the list of priority programmes referred to in article 414, par.2, subparagraph 3 of the Act and with the action plan referred to in article 414, par. 2, subparagraph 3 of the Act, meets the criteria for project selection referred to in article 414, par. 1, subparagraph 1 of the Act and, incase of subventions, was listed among projects qualified for financial assistance, excluding projects listed in article 11, par. 2 subparagraph 11,

3) the applicant documented his ability to fully cover the costs of the planned project,

4) all the fees and penalties due to the National Fund and other liabilities due to the National Fund imposed on the applicant have been discharged,

5) the project defined in the application for financial assistance has not been completed,

6) the National Fund has not denounced an agreement for financial assistance within the last three years as the result of using the funds without accordance with their designation or of fulfilling the application with untrue data.

2. Listing of projects financed by subventions among projects qualified for financial assistance is made periodically (in sessions), excluding projects defined in Article 11 par. 2 subparagraph 11. The sessions’ date shall be published on the Internet site of the National Fund.

1. The Management Board of the National Fund may require, as a precondition for granting the financial assistance, to provide an opinion on feasibility of the project, drawn up by experts.

2. Drawing up the opinion referred to in par. 1 shall not be conferred to members of the Supervisory Board, employees of the National Fund, employees of the Ministry of Environment and bodies of the local and state authorities who take decisions related to the project covered by the financial assistance.

1. Payment of funds, subject to Article 4, shall be made on the basis of financial documents confirming incurred costs of the project, hereinafter called the Costs, according to the material-financial schedule or similar document, accepted by both parties concluding the agreement, annexed to the agreement.

2. The National Fund may reimburse costs incurred before the date of the agreement for financial assistance, if the costs were incurred after adoption of the resolution on granting the assistance by the Management Board.

3. The National Fund may reimburse other costs incurred before adoption of the resolution on granting the financial assistance by the Management Board, only if the costs relate to continuous (multi-annual) projects, the project is carried out on yearly basis and listed in the financial plan of the National Fund.

4. In justified cases, the amount stated in the agreement may be paid in advance, before submitting the financial documents referred to in article 1. It refers to financial assistance granted to projects:

3) if the obligation of payment is based on material-financial schedule or similar document, annexed to the agreement.

5. If the advance referred to in article 4 exceeds EUR 500.000 (subventions) or EUR 1.000.000 (loan), the applicant shall open a bank account, where the advances from the National Fund will be transferred.

6. Interests on advance referred to in par. 5, shall be settled with the National Fund according to the rules defined in the agreement.

1. The loan granted by the National Fund shall not exceed 80% of the costs of the project, excluding projects co-financed by the non-reimbursable foreign funds.

2. The amount of the loan for projects financed exclusively by the National Fund shall not be less than PLN 2.000.000, excluding payment loans and loans granted from sub-funds.

3. In each case, the amount of the financial assistance in the form of credits granted by the banks using funds from the National Fund based on the credit facility, shall be established in the agreement between the National Fund and the bank.

1. When granting loans and credits, the following grace period for instalment repayments are applied:

1) not longer than six months, subject to subparagraph 2, from the last repayment date defined in the agreement,

2) not longer than eighteen months, from the last repayment date – when financing projects based on incomes from product fees referred to in the Act of 11 May 2001 on the entrepreneurs’ duties in the field of management of particular wastes and product and deposit fee (Dz. U. No. 63, pos. 639, with later amendments[2]) and based on the Act of 20 April 2004 on substances depleting the ozone layer (Dz. U. No. 121, pos. 1263 with later amendments[3]) and based on the Act of 20 January 2005 on recycling of vehicles withdrawn from use (Dz. U. No. 25 pos. 202 with later amendments[4]),

3) In each case, the grace period for instalment repayments of credits granted by the banks using funds from the National Fund based on the credit facility, shall be established in the agreement between the National Fund and the bank.

2. In case of using the loan without accordance with the material-financial schedule constituting an integral part of the agreement, the National Fund may charge a fee for letting for use, in the amount of 0,1% of the unused loan amount.

1. The credit period, subject to par. 2 and 3, shall not be longer than 15 years.

2. The credit period shall not be longer than 10 years, if the financial assistance was granted based on the Acts referred to in Article 7 par. 1 subparagraph 2.

3. The credit period for preferential loans and payment loans referred to in Article 2 subparagraph 1 and 2 and Article 10, shall be established by the National Fund depending on the conditions for financing the project from the Cohesion Fund.

1. The loan interest rates shall be established in reference to the bill of exchange discount rate, hereinafter called the „s.r.w.”, published by the National Bank of

Poland

1) 0,1 s.r.w. in case of loans granted based on incomes referred to in Article 7 par. 1 subparagraph 2,

2) 0,3 – 0,7 s.r.w. in case of loans granted to the local government legislative bodies and their associations as well as entities performing services commissioned by the local government legislative bodies for:

a) projects defined in the „National Programme for Municipal Waste Water Treatment”,

b) investments related to construction, development and modernization as well as liquidation and rehabilitation of municipal waste tips,

c) investments in the area of renewable energy referred to in the Power Law Act of 10 April 1997 (Dz. U. of 2006, No. 89 pos. 625 with later amendments[5]) and the regulation of the Minister of Economy of 19 December 2005 on detailed scope of the duty to obtain and to present for write-off of the certificates of origin, payment of substitute fee and purchase of energy and heat produced from renewable energy sources (Dz. U. No. 261, pos. 2187),

The interest rate presented in the table below is calculated based on the total budgetary income by an inhabitant in PLN on the basis of data from 2005:

Income per inhabitant of the union shall be calculated based on the following formula:

d₁ to d_n- total income per inhabitant in the units participating in the union,

The interest rate referred to in subparagraph 2 shall not refer to projects co-financed by the non-reimbursable foreign funds and by the funds of the EKOFUNDUSZ foundation.

3) 0,4 s.r.w. in case of loans for small and medium enterprises for projects in the area of renewable energy sources, however not less than 1,75%,

4) 0,5 s.r.w. in case of other investment loans in the area of renewable energy, however not less than 2,12%,

5) 0,6 s.r.w. in case of loans for small and medium enterprises, however not less than 2,55%,

6) 0,8 s.r.w. for payment loans, loans for projects co-financed by non-reimbursable foreign funds and by the funds of the EKOFUNDUSZ foundation as well as other loans, including loan granted to voivodship funds for environment protection and water management, however not less than 3,2%.

1. In order to ensure continuity of the financing projects within the area of environment protection and water management, for which the application for financial assistance from foreign funds was filed, the payment loan may be granted, subject to Article 9 par. 2 subparagraph 6. The base for granting the payment loan is the feasibility study accepted by the Management Board of the National Fund.

2. The payment loan referred to in par. 1 may be granted only if the National Fund participated in evaluation of projects co-financed by the foreign funds.

3. The payment loan is intended for payment of invoices or similar financial documents issued during realization of the project referred to in par. 1.

1. The National Fund may, in writing, grant a promise to co-finance the project.

2. The term and conditions for granting the promise shall be determined, in the form of resolution, by the Management Board of the National Fund.

3. In case of projects co-financed by the Cohesion Fund, the promise is granted after adoption by the Management Board of the National Fund of the Feasibility Study.

1. The National Fund shall grant payments to the interest of the preferential credits granted by the banks in accordance with the conditions defined in the agreement between the bank and the National Fund.

2. The payment to the interest shall be a difference between the interest rate adopted for settlements defined in the agreement between the National Fund and the bank, and the interest rate 0,8 s.r.w.

3. The interest rate for settlements with the bank referred to in par. 2 shall not exceed 1,2 s.r.w. per annum.

1. The subventions shall be granted according to the selection criteria of the projects financed by the National Fund for Environment Protection and Water Management.

1) water and waste water management projects in the area of supporting pro-ecological inland waterway transport (the Act of 28 October 2002 on the Inland Waterway Transport Fund and Reserve Fund (Dz. U. No 199, pos. 1672)),

3) rehabilitation of municipal waste tips – subvention up to 20% of the rehabilitation costs – for local government legislative bodies or entities totally owned by such entities and carrying out their tasks, refers to tips where exploitation started before 1 October 2001 (Act on Waste, Dz.U. of 2001, No 62, pos. 628 with later amendments^{^[9]})

11) projects indicated by the Minister of Environment, particularly important from the point of view of the national ecological policy, included in the action plan of the National Fund, to the amounts not exceeding the amount defined in this plan, including projects resulted from agreements concluded between the Minister of Environment and the National Fund as well as support for improving the qualifications of the personnel for the regional development needs in the faculty of Spatial Planning – specializations as communicated to the Minister of Education and Higher Education,

a) defined in Article 9, par. 1 of the regulation of Minister of Environment of 8 July 2002 on detailed rules and criteria for managing funds from product fees (Dz. U. No. 22, pos. 1052),

b) financed from the National Fund’s incomes received under: the Act of 29 July 2005 on used electric and electronic equipment (Dz. U. No. 180, pos. 1495); the Act of 22 December 2004 on trading in certificates for greenhouse gas and other substance emission into the atmosphere (Dz. U. No. 281, pos. 2784); the Act of 20 April on substances depleting the ozone layer (Dz. U. No. 121, pos. 1263 with later amendments[10]); the Power Law Act of 10 April 1997 (Dz. U. of 2006, No. 89, pos. 625 with later amendments[11]),

c) financed by the incomes from Geological and Mining Law, referred to in Article 401 par. 6 of the Act,

d) related to disassembly of vehicles withdrawn from use, referred to in Article 401, par. 12, subparagraph 1 of the Act,

e) defined in Article 152 and falling within the scope of tasks of the President of the National Management Board of the Water Management, resulting from Article 90 par. 1 subparagraph 6 and 7a of the Water Law Act.

3. The subventions may be granted to projects co-financed by the European Union funds, with the exclusion of projects co-financed by the Cohesion Fund.

4. The subventions up to 50% of the project costs may also be granted to air protection projects, waste water treatment projects and sewage systems projects, carried out by the entities operating in health protection area, health prevention and rehabilitation, social aid, protection of monuments and landscape, with the exclusion of companies, banks, partnerships, corporations and budgetary units.

1. The loan, subject to Article 14, may be partially cancelled after the following conditions are met jointly:

1) the application for cancellation has been submitted on the application form provided by the National Fund,

2) the project was carried out within the scope defined in the material-financial schedule, not later than within the period defined when the agreement was signed,

4) the achievement of the ecological result of the project has been documented within 30 days from the date defined in the agreement,

5) at least 50% of the loan has been repaid, excluding projects financed from the incomes defined in the Act of 20 April 2004 on substances depleting the ozone layer (Dz. U. No. 121, pos. 1263 with later amendments³), in the Act of 29 July 2005 on used electric and electronic equipment (Dz. U. of 2005, No. 180, pos. 1495), in the Act of 11 May 2001 on the entrepreneurs’ duties in the field of management of particular wastes and product and deposit fee (Dz. U. No. 63, pos. 639²),

6) principal instalments and interests has been paid within terms defined in the agreement, subject to par. 2,

7) the loan taker, according to separate regulations, had paid all the fees, penalties and other liabilities due to the National Fund,

8) the loan taker shall assign the cancelled amount to the environment protection project, according to conditions set up in a separate agreement concluded with the National Fund.

2. The condition defined in par. 1 subparagraph 6 shall be deemed fulfilled, if:

1) within the period of 10 years, the late payment of instalments has not exceeded 10 days, or 15 days if the crediting period is longer,

2) within the period of 10 years, the late payment of instalments has not exceeded 20 days and concerned the amount which not exceeded 2,5% of the total amount of the loan or 30 days and concerned the amount which not exceeded 3,5% of the total amount of the loan if the crediting period is longer.

3. The submission of the application for cancellation shall not relieve from its obligation to pay the loan due amount to the National Fund.

4. The cancelled amount shall not be treated as an own share when applying for co-financing from the National Fund.

1) 30% of the loan paid from product fee incomes and from the incomes resulting from the Act on substances depleting the ozone layer, referred to in Article 7, par. 1, subparagraph 2,

2) 10 % of the loan in case of other agreements, however the cancelled amount shall be limited to PLN 1.000.000 and shall be decreased of possible subvention granted for the same project.

1) amounts of the loan for the cancellation of which the applicant applied after these loans had been repaid,

2) credits paid from the National Fund, granted on the basis of credit contracts concluded within the framework of credit facility,

5) Loans paid to beneficiaries, to whom the co-financing from non-reimbursable foreign funds or from the EKOFUNDUSZ Foundation funds for the same project were granted,

6) Loans granted to the voivodship funds for environment protection and water management.

All matters, in relation to which until 31 December 2006 the Management Board resolution on conditions for granting the financial assistance had been adopted, the „Rules for granting and cancellation of loans and granting guarantees, credits and subventions from the national fund for environment protection and water management” apply. They are annexed to the Supervisory Board resolution no. 154/05 of 19 December 2005 amended by resolution no. 8/06 of 18 January 2006 and by resolution no. 32/06 of 25 April 2006, as amended on 31 December 2006.

These rules shall apply to all resolutions on cancellation of a part of the loan amount adopted within the period when these rules have been applicable, excluding cancellations where their conditions and total amount have been declared in the loan agreement.

The Supervisory Board, at the request of the Management Board of the National Fund, may agree to exempt from the regulations defined in these rules.

[1] The amendments to this Act have been published in the Dz. U., 2004 No. 123 pos. 1291, No. 145, pos. 1537, No. 281, pos. 2785, 2005 No. 78, pos. 684, No. 183, pos. 1538

[2] The amendments to the above mentioned Act has been published in Dz. U. of 2002, No. 113, pos. 984, of 2003, No. 7, pos. 78, and of 2004, No. 96, pos. 959, No. 121, pos. 1263, of 2005, No. 33 pos. 291, No. 175, pos. 1458

[3] Dz. U. of 2005, No. 175, pos. 1458, No. 203, pos. 1683

[4] Dz. U. of 2005, No. 175, pos. 1458

[5] Amendments to the mentioned Act have been published in Dz. U. of 2006, No. 104, pos. 708

^{^[6]} Entity, where the local government legislative body holds more than 50% of shares

^{^[7]} Entity, where the local government legislative body holds more than 50% of shares

^{^[8]} Entity, where the local government legislative body holds more than 50% of shares

[9] Amendments to the mentioned Act have been published in Dz. U. of 2002, No. 41, pos. 365, No. 113, pos. 984, No. 199, pos. 1671, of 2003, No. 7, pos. 78, of 2004, No. 96, pos. 959, No. 116, pos. 1208, No. 191, pos. 1956, of 2005, No. 25, pos. 202, No. 90, pos. 758, No. 130, pos. 1087, No. 175, pos. 1458, of 2006, No. 50, pos. 360, No. 180, pos. 1495

[10] Amendments to the mentioned Act have been published in Dz. U. of 2005, No 175, pos. 1458, No. 203, pos. 1683

[11] Amendments to the mentioned Act have been published in Dz. U. of 2006, No. 104, pos. 708